Medicaid fraud at Minnesota autism centers was said to be rampant. Two people have been charged

MINNEAPOLIS — At two Minnesota autism treatment centers, any child — autistic or not — could be qualified for services, federal prosecutors allege.

That is one way authorities claim those individual health care providers defrauded a state program, billing the Department of Human Services and insurers roughly $20 million over five years.

Assistant U.S. Attorney Rebecca Kline, who runs the Minnesota federal prosecutors’ white-collar crime section, said during a plea hearing in March that children who did not have autism spectrum disorder still were somehow enrolled to receive services at Star Autism in St. Cloud.

Six months after charges were first filed in court, however, it remains unclear exactly how business owners could have green-lit children for services. It’s a mystery since industry experts say autism diagnoses — a necessary factor to qualify — rely on in-depth, one-on-one interviews with the child and parents.

Yet charging documents against the owners of Star Autism and Smart Therapy Center in Minneapolis say non-autistic kids were somehow qualified for services, allowing millions of dollars to fraudulently flow to the businesses. Owners of both businesses have pleaded guilty and await sentencing.

Minnesota has figured prominently in President Donald Trump’s battle against fraud in federal programs. The state’s Medicaid-funded program for children with autism comprises a good chunk of the $9.4 billion in human services spending between 2022 and 2025 now under investigation.

National outrage over fraud, tinged by anti-Somali bias in Trump’s public remarks, has given the administration ammunition to pursue cuts to Medicaid and social services, though few cases have been brought to court. A judge on Monday, April 6, declined to immediately resume the Medicaid funding.

So far, $34.2 million in fraud across 14 high-risk Medicaid programs has been alleged in pending criminal cases, most against Somali defendants. Months have passed since anyone else was charged with a crime in connection with the federal cases. Prosecutors in the U.S. Attorney’s Office in Minnesota, whose ranks have been diminished substantially by resignations in the wake of Operation Metro Surge, have promised more are on the way.

Demand for autism treatment is reaching new heights across the country. About 1 in 31 children today are diagnosed as on the autism spectrum. Cases accelerated over the past 20 years as diagnostic criteria loosened, detection methods advanced and general understanding of autism expanded.

Minnesota’s Early Intensive Developmental and Behavioral Intervention program for kids with autism always relied on front-end safeguards such as clinical supervision to ensure the basic requirement that the children enrolled actually have autism.

Those safeguards are facing intense scrutiny from Minnesota lawmakers pressuring the Department of Human Services for stronger oversight of the program to address fraud concerns.

Federal prosecutors say the business owners either “worked with” or forged the signatures of medical experts known as qualified supervising professionals, or QSPs. One unnamed witness said Smart Therapy also paid off parents who agreed to let their kids go into autism treatment, though no charges have been brought against parents.

“To run their fraud scheme, [Smart Therapy owner Asha] Hassan and her partners needed children who had an autism diagnosis and an individual treatment plan,” the one-count indictment for wire fraud against Hassan says.

“Where a child did not have an autism diagnosis and an individual treatment plan, Hassan and her partners worked with a QSP [qualified supervising professional] to get the recruited children qualified for autism services. There was no child that Smart Therapy was not able to get qualified for autism services.”

Dr. Eric Larsson, executive director of the autism research and education group Lovaas Institute Midwest, said a fraudster would need to overcome several layers of oversight. In order to get a non-autistic child qualified, someone would need to find “a loophole through that process. And I don’t know what it is,” Larsson said.

Rigor in process

Diagnosing a child with autism to qualify for state services is designed to be lengthy and intensive.

It generally requires in-person observation of the child, a parent diagnostic interview and the development of a comprehensive multidisciplinary evaluation, which usually requires hours of work, said Dr. Amy Esler, a pediatric psychologist and professor at the University of Minnesota.

“It’s not just boxes you check,” she said.

As a behaviorally defined diagnosis, Esler said, autism has “very fuzzy” boundaries. In her practice, she typically sees children who are difficult to diagnose, often those on the lighter end of the spectrum or those with advanced medical complexity.

Minnesota requires the involvement of a QSP who must possess a specialized college-level education, such as a master’s degree in social work or a doctorate in psychology. Those careers receive oversight from state professional boards.

If it’s true that many children who did not need autism services were given false diagnoses, Esler said, any qualified person who helped facilitate that “certainly went outside the professional ethics of our profession.”

She added that many of her patients are afraid and frustrated with an ongoing threat to cut off funding to the legitimate providers in Minnesota.

Payoffs and an unnamed source

The FBI searched the two autism centers so far connected to criminal activity in December 2024. At least one of the cases was an outgrowth of the investigation into Feeding Our Future, the nonprofit that authorities say defrauded a federal meals program out of more than $250 million. More than 60 people have been convicted so far in the case.

One search warrant affidavit says an unnamed source who worked as a “behavioral technician” for Smart Therapy told investigators that his co-workers did not provide real therapy services nor were they qualified to do so. Rather, the source said, the other behavioral technicians would often show up late to work and scroll on their phones. The job required no formal education or training to start administering therapy.

“Many of the children appeared to have other developmental delays such as speech delays, but not autism,” the source told the FBI, though court records don’t say how they knew that.

The source also tipped off investigators to alleged kickback payments made to parents of children enrolled for autism treatment at Smart Therapy.

The source said the center’s owner even coordinated door-knocking campaigns to recruit Somali families to sign up for services.

“Individual A did not pay any patients directly or know the amount of the payments but observed parents picking up white envelopes from Smart Therapy’s autism center,” an FBI agent investigating the case wrote in the affidavit supporting a search warrant in 2024.

Business and financial records reviewed by the FBI suggested the center’s administrators billed for services purportedly overseen by medical providers who did little to no work for the autism centers.

In May 2022, an inspector reported Star Autism to state officials following an onsite visit, saying the provider was missing intake documents and personnel files. The inspector found QSP “signatures were pre-printed on records,” according to the FBI.

In defrauding the state’s autism program, only the business’ registered owners — Hassan of Smart Therapy and Abdinajib Hassan Yussuf of Star Autism — were federally charged.

Problems identified

After Trump began attacking Minnesota leaders over Medicaid fraud, the state Department of Human Services hired Minnesota-based Optum, which specializes in health care data and analytics, to assess its programs for vulnerabilities.

Optum’s heavily redacted preliminary analysis was released publicly in February. It revealed approximately $703 million in potential overspending, though not necessarily fraud, waste or abuse, through the autism program alone over a four year period.

The analysis also flagged 90% of claims that Medicaid-funded autism intervention providers billed the state, saying those veered from acceptable standards.

Since the scrutiny began, the Department of Human Services has installed new rules that require QSPs to be employed by a provider and limit how often sessions may be conducted remotely, such as via Zoom.

Under Minnesota’s autism program, it used to be common practice for licensed professionals to work as contractors, sometimes from out of state, for autism centers.

During a February legislative hearing, top Department of Human Services officials acknowledged concerns associated with supervision by licensed professionals. Inspector General James Clark said the department is critically examining that part of the system.

“We have questions. Is this clinical professional actually overseeing service delivery at five, six, seven autism centers? That’s a program design gap there,” Clark said.

Jay O’Neil, president of Behavioral Dimensions, an in-home autism therapy provider, said some professionally licensed supervisors did not have sustained involvement. He said fraud could go undetected if a qualified professional is “not doing their due diligence.”

“I think that was a big, big problem,” O’Neil said.

Ellie Wilson of the Autism Society of Minnesota said advocates fought hard to gain public support for programs to help people with disabilities lead independent and successful lives. She said she sees signs of that support now eroding.

Wilson said the allegations about false diagnoses are a sensitive area for many people with autism who already experience prejudices and disbelief.

“People don’t believe that they are disabled in the first place,” she said.